Rx for counties

North Carolina counties should be relieved of the unfair burden of Medicaid costs. Senators shouldn't be a stumbling block

In speeches, Tar Heel leaders often recognize there are two North Carolinas, that counties such as those in the Triangle and the state's prosperous middle have resources that many eastern counties don't, and so on. Still, North Carolina continues to bill all 100 of its counties the same percentage for Medicaid coverage for the poor, as it has for three decades. All counties are squeezed, but the situation has reached crisis levels in the poorest ones.

House leaders have recognized the need for reform, including in their version of the state budget a cap on the Medicaid costs billed to counties. The Senate budget doesn't include such a cap and, after nearly two weeks of budget negotiations, senators have yet to come around. That's unfortunate.

Medicaid is a state and federal health insurance program, with no mandate for county participation. On its own, North Carolina decided to tap counties for 15 percent of the state's share.

Each county pays 15 percent of the Medicaid costs incurred by its own residents. Nowhere else in America are counties saddled with so large a share of Medicaid costs. And the formula doesn't take into account the counties' disparities in wealth.

In more than half of the states, counties pay nothing. That's a perfectly proper arrangement under the compassionate 1965 law that created Medicaid. After all, counties have no say in the program's coverage.

What's more, there's reason to believe North Carolina would manage Medicaid costs more effectively if it weren't leaning on the counties' resources. And leaning hard is what North Carolina has been doing. The state's Medicaid costs have risen 44 percent since 2000. During the same period counties have watched their Medicaid costs jump 67 percent.

The poorest counties with large populations eligible for Medicaid have felt the pain most acutely. Even in counties on a sounder financial footing, there's evidence of a structural problem. Health costs are rising faster than the property tax base from which county governments pull their revenue. As of last year, nearly half of the state's counties spent more on Medicaid than on school construction and renovation, which are the counties' responsibility.

As worthy a program as Medicaid is, North Carolina shouldn't allow out-of-control costs to block progress in education, homeland security and economic development. Yet the program inadvertently does that in 15 counties which are forced to spend 10 percent of their budgets for Medicaid. Even in wealthier counties, Medicaid costs hamper their ability to keep improving schools while meeting the demands of growth.

For the state House finally to recognize the counties' problem is encouraging. The House proposal -- a permanent cap on the counties' share, along with aid to the hardest hit counties -- is a step closer to the relief that the counties need. On that score, the Senate's latest proposal -- one-time aid freezing the counties' 2006-07 share at this year's levels -- leads nowhere.

This state and nation must provide health care for the poor. It's the duty of a civilized society. Nevertheless, North Carolina's management of those efforts could stand improvement and, for that, the public is still waiting.